Kansas City Southern Inc. (KSU): Today's Featured Services Winner

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

Kansas City Southern ( KSU) pushed the Services sector higher today making it today's featured services winner. The sector as a whole was unchanged today. By the end of trading, Kansas City Southern rose $1.99 (2.6%) to $79.60 on average volume. Throughout the day, 1.2 million shares of Kansas City Southern exchanged hands as compared to its average daily volume of 889,300 shares. The stock ranged in a price between $77.12-$79.68 after having opened the day at $77.17 as compared to the previous trading day's close of $77.61. Other companies within the Services sector that increased today were: Star Bulk Carriers ( SBLK), up 12.3%, Frisch's Restaurants ( FRS), up 11.3%, SuperMedia ( SPMD), up 11.3%, and Dex One ( DEXO), up 10.3%.
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Kansas City Southern, through its subsidiaries, engages in the freight rail transportation business. Kansas City Southern has a market cap of $8.4 billion and is part of the transportation industry. The company has a P/E ratio of 22.1, above the S&P 500 P/E ratio of 17.7. Shares are up 12.2% year to date as of the close of trading on Friday. Currently there are nine analysts that rate Kansas City Southern a buy, one analyst rates it a sell, and six rate it a hold.

TheStreet Ratings rates Kansas City Southern as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, expanding profit margins, largely solid financial position with reasonable debt levels by most measures and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

On the negative front, Seanergy Maritime Holdings ( SHIP), down 18.2%, KIT Digital ( KITD), down 16.2%, TOP Ships ( TOPS), down 12.8%, and Oxygen Biotherapeutics ( OXBT), down 11.1%, were all laggards within the services sector with Target ( TGT) being today's services sector laggard.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the services sector could consider iShares Dow Jones US Cons Services ( IYC) while those bearish on the services sector could consider ProShares Ultra Short Consumer Sers ( SCC).

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